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How mobile helped Best Buy reclaim the shopping experience: NRF session

January 18, 2012

NEW YORK – During a session at the NRF 101st Annual Convention & Expo, an executive from Best Buy revealed the company’s mobile strategy and discussed how check-ins and other mobile initiatives play an important role for the retailer.

During the “Has mobile marketing revolutionized shopper engagement?” panel, executives from Best Buy, Simon Brand Ventures and Shopkick discussed the ways mobile can be used to help drive consumers in-store. Additionally, the panel presented certain challenges that retailers face when trying to bridge mobile between bricks-and-mortar stores and online commerce.

“Best Buy is a multichannel retailer that is more than our retail stores and, and mobile is the bridge between the two for us,” said W. Don Wortley, digital marketing manager at Best Buy, Richfield, MN.

“One of the big challenges is combining a struggling physical world with the digital world, and the master brand that gets it right will focus on customer experience,” he said.

“Mobile is still primarily used as a communication device, but if we are listening to what consumers are saying, they are loud about what they want.”

Mobile shopping
Mr. Wortley also spoke about Best Buy’s overall mobile strategy and how the retailer is connecting to consumers with mobile devices.

Specifically, Best Buy’s mobile strategy includes three main pillars – enhance the store experience, focus on contextual and local information and enable commerce anywhere a consumer is shopping.

Best Buy originally rolled out the Shopkick technology in 2010 as a way to reward shoppers for coming in-stores.

In addition to Shopkick, the retailer also has used QR codes, mobile apps and a mobile Web site to help consumers find electronics while on the go.

To make its products shoppable wherever consumers are, Best Buy released its API to let third parties link to the retailer’s commerce-enabled services.

For example, the WolframAlpha app, which answers questions for consumers in real-time lets shoppers browse through Best Buy’s products via the app.

Also on the panel was Patrick Flanagan, vice president of digital strategy and marketing at Simon Brand Ventures, Indianapolis, IN.

Simon Brand Ventures owns and operates 300 malls in the United States that bring in $3 billion annually.

The company is using Shopkick in 250 of its malls to drive consumers in-stores in addition to several other mobile initiatives.

“For years we felt disconnected to our shoppers and we were trying to reclaim the shopping experience and looked to mobile as an immediate first need,” Mr. Flanagan said.

“This year, a mass occurred where consumers could shop on mobile and it reshaped our experience that is a core part of our mix,” he said.

In addition to check-ins, Simon Brand Venture malls also use mobile Web, apps, Wi-Fi and SMS to communicate with shoppers.

Additionally, Mr. Flanagan said that tablets play a core part of a retailer’s mobile strategy and need to be treated differently than smartphones for in-store shopping.

One of the biggest challenges for Simon Brand Venture has been getting consumers to discover the company’s apps, which is typically the mobile channel with the deepest enrichment.

According to an executive at the from the mobile reward service Shopkick, retailers that use a check-in to entice shoppers to come in stores can increase their conversion rate to 50 percent.

“GPS can be a problem for check-ins because it is not that great and can waste money by not seeing where consumers really are,” said Doug Galen, chief revenue officer at Shopkick, Palo Alto, CA.

“Marketers pay for a click to go to from a page of a Web site, which can have a one to two percent conversion rate, but by walking into a store you can get closer to 50 percent conversion rate,” he said.

“So as a retailer, where do want to put dollars?”

Mobile concerns
After the brands discussed what they are doing in mobile, the panel opened into a Q&A session where attendees could ask questions, many of which dealt with data and privacy concerns.

For Simon Brand Ventures, one of the big concerns for mall retailers using check-ins is how their data will be shared by competing retailers in the same area.

“We want all teneets  to be open and deal on the platform so all retailers can participate,” Mr. Flanagan said.

According to Mr. Flanagan, approximately one-half of retailers in malls offer Shopkick deals and promotions.

Best Buy’s Mr. Wortley said that check-ins can be a tricky slope for retailers to understand where their consumers are coming from without spilling their secret sauce.

“As a retailer, you want to know your customers well, but on the flip side we want some portions of our database so we can understand how to sell our products,” Mr. Wortley said.

Shopkick’s Mr. Galen took an opposite view on the issue by saying that data sharing will need to be accepted by retailers in order for them to succeed by using online giant AOL as an example.

“When you think about AOL, you think about walled gardens,” Mr. Galen said.

“Best Buy realizes that in its loyalty program, no one owns the consumers and that they have to give multiple bites,” he said.

“It is not about walled gardens, it is about finding the best thing for the company.”

Attendees were also interested in knowing how mobile payments are shaking out for retailers.

“Best Buy’s perspective is to take a user’s information, determine offers to push out and hope that consumers go through the transaction of using it,” Best Buy’s Mr. Wortley said.

“Right now, the technology is more advanced than consumer’s behavior – it is an awesome solution but people are not hungry for it yet,” he said.

Final Take
The panelists discuss the future of mobile and retail

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One Response to “How mobile helped Best Buy reclaim the shopping experience: NRF session”

  1. Beth Says:

    Great article and summary of an excellent panel presentation and discussion. It was a extremely insightful on how retailers can better use and understand mobile marketing and commerce.

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